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Pension and Other Post Retirement Benefit Plans | 12 Months Ended
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Dec. 31, 2016
Compensation And Retirement Disclosure [Abstract] |
Pension and Other Post Retirement Benefit Plans | Note 12 — Pension and Other Post Retirement Benefit Plans On August 8, 2008 the Company established The Executive Nonqualified Defined Benefit Plan of Gentherm Incorporated (the “Plan”), an unfunded executive pension plan, with an effective date of April 1, 2008. The Company’s Chief Executive Officer, is the only participant in the Plan which will, if fully vested, provide for 15 annual retirement benefit payments of $300,000 each beginning January 1, 2018. The participant will become entitled to receive such retirement benefit payments, or a portion thereof, through his continuous service to the Company over a six year period starting on April 1, 2011. The Company records a projected benefit obligation representing the present value of future plan benefits when earned by the participant. The following table sets forth the benefit obligation, amounts recognized in the Company’s financial statements and the principal assumptions used:
|  | 2016 |  |  | 2015 |
Change in projected benefit obligation: |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 2,898 |  |  | $ | 2,474 |
Service cost |  |  | 387 |  |  |  | 379 |
Interest cost |  |  | 98 |  |  |  | 80 |
Actuarial (gain) loss |  |  | 36 |  |  |  | (35 | )
Benefit obligation at end of year |  | $ | 3,419 |  |  | $ | 2,898 |
Note 12 — Pension and Other Post Retirement Benefit Plans (Continued) The entire benefit obligation from the Plan is classified as a non-current liability within pension benefit obligations in the Company’s consolidated balance sheet. Service and interest cost is included in selling, general and administrative expenses in the Company’s consolidated statements of income and actuarial gains and losses are included the Company’s consolidated balance sheet as part of accumulated other comprehensive income within shareholders’ equity. Actuarial gains or losses are amortized to selling, general and administrative expense in the Company’s consolidated statements of income based on the average future service life of the Plan using the corridor method. A discount rate assumption of 3.25%, 3.40% and 3.25% was used to determine the benefit obligation for the years ended December 31, 2016, 2015 and 2014, respectively. A discount rate assumption of 3.40%, 3.25% and 4.25% was used to determine and the net periodic service cost for years ended December 31, 2016, 2015 and 2014, respectively. We do not expect contributions to be paid to the Plan during the next fiscal year. Although the Plan is not funded, the Company has established a separate trust having the sole purpose of paying benefits under the Plan. The only asset of the trust is a corporate-owned life insurance policy (“COLI”). The COLI is valued at fair value using quoted prices listed in active markets (Level 1 input based on the U.S. GAAP fair value hierarchy). The policy value of the COLI was $2,112 and $1,993 as of December 31, 2015 and 2014, respectively, and was included in other non-current assets. Components of the Plan’s net periodic pension benefit cost for the years ended December 31, 2016, 2015 and 2014 are as follows:
|  | 2016 |  |  | 2015 |  |  | 2014 |
Service cost |  | $ | 387 |  |  | $ | 379 |  |  | $ | 335 |
Interest cost |  |  | 98 |  |  |  | 80 |  |  |  | 78 |
Amortization of actuarial losses |  |  | — |  |  |  | 27 |  |  |  | — |
Net periodic benefit cost |  | $ | 485 |  |  | $ | 486 |  |  | $ | 413 |
Note 12 — Pension and Other Post Retirement Benefit Plans (Continued) Pretax amounts recognized in other comprehensive income for the years ended December 31, 2016, 2015 and 2014 are as follows
|  | 2016 |  |  | 2015 |  | 2014 |
Actuarial Losses/(gains) |  | $ | 36 |  |  | $ | (35) |  | $ | 213 |
Amortization of actuarial losses |  |  | — |  |  |  | (27) |  |  | — |
|  | $ | 36 |  |  | $ | (62) |  | $ | 213 |
Tax benefit of $14 was recognized in other comprehensive income related to the Plan for the year ended December 31, 2016. Tax expense of $23 was recognized in other comprehensive income related to the Plan for the year ended December 31, 2015. Tax benefit of $121 was recognized in other comprehensive income related to the Plan for the years ended December 31, 2014. Pretax unrecognized actuarial losses recorded in accumulated other comprehensive loss not yet recognized in net periodic benefit cost were $302 and $266 as of December 31, 2016 and 2015, respectively. No amount of pretax unrecognized actuarial loss recorded in accumulated other comprehensive income as of December 31, 2016 are expected to be recognized as components of net periodic benefit cost in the year ending December 31, 2017. Gentherm GmbH has an established defined benefit plan for retired and current members of its executive management team. Gentherm GmbH records a projected benefit obligation representing the present value of future plan benefits when earned by the participant. The following table sets forth the benefit obligation and amounts recognized in the Company’s financial statements:
|  | 2016 |  |  | 2015 |
Change in projected benefit obligation: |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 6,980 |  |  | $ | 8,120 |
Service cost |  |  | — |  |  |  | — |
Interest cost |  |  | 154 |  |  |  | 142 |
Paid pension distributions |  |  | (261 | ) |  |  | (257 | )
Actuarial (gains)/losses |  |  | 691 |  |  |  | (182 | )
Past service cost |  |  | — |  |  |  | — |
Exchange rate impact |  |  | (238 | ) |  |  | (843 | )
Benefit obligation at end of year |  | $ | 7,326 |  |  | $ | 6,980 |
The following table sets forth the fair value of the plan assets for the periods ending December 31, 2016 and 2015:
|  | 2016 |  |  | 2015 |
Change in plan assets: |  |  |  |  |  |  |  |
Plan assets at beginning of year |  | $ | 3,333 |  |  | $ | 3,615 |
Actual return on plan assets |  |  | 125 |  |  |  | 126 |
Contributions |  |  | 261 |  |  |  | 257 |
Paid pension distributions |  |  | (261 | ) |  |  | (257 | )
Actuarial gains/(losses) |  |  | (27 | ) |  |  | (28 | )
Exchange rate impact |  |  | (105 | ) |  |  | (380 | )
Plan assets at end of year |  | $ | 3,326 |  |  | $ | 3,333 |
Note 12 — Pension and Other Post Retirement Benefit Plans (Continued) The $4,000 net liability from the Gentherm GmbH plan is classified as a noncurrent liability in pension benefit obligation. Pretax amounts recognized in other comprehensive income for the years ended December 31, 2016, 2015 and 2014 are as follows:
|  | 2016 |  |  | 2015 |  | 2014 |
Actuarial (gains)/losses |  | $ | 718 |  |  | $ | (154) |  | $ | 1,916 |
Amortization of actuarial (losses)/gains |  |  | (48 | ) |  |  | (59) |  |  | 166 |
Amortization of prior service cost |  |  | — |  |  |  | (572) |  |  | — |
|  | $ | (670 | ) |  | $ | (785) |  | $ | 2,082 |
Tax benefit of $171 was recognized in other comprehensive income related to the Gentherm GmbH defined benefit plan for the year ended December 31, 2016. Tax expense of $211 and tax benefit of $559 were recognized in other comprehensive income for the years ended December 31, 2015 and 2014, respectively. Pretax unrecognized actuarial losses recorded in accumulated other comprehensive loss not yet recognized in net periodic benefit cost were $2,406 and $1,821 as of December 31, 2016 and 2015, respectively. We expect $73 of pretax unrecognized actuarial loss recorded in accumulated other comprehensive income as of December 31, 2016 to be recognized as components of net periodic benefit cost in the year ending December 31, 2017. Components of the Plan’s net periodic pension benefit cost for the years ended December 31, 2016, 2015 and 2014 are as follows:
|  | 2016 |  |  | 2015 |  |  | 2014 |
Service cost |  | $ | — |  |  |  | — |  |  |  | 304 |
Interest cost |  |  | 154 |  |  |  | 142 |  |  |  | 181 |
Return on plan assets |  |  | (125 | ) |  |  | (126 | ) |  |  | (89 | )
Amortization of prior service cost |  |  | — |  |  |  | 572 |  |  |  | — |
Amortization of actuarial loss (gains) |  |  | 48 |  |  |  | 59 |  |  |  | (166 | )
Net periodic benefit cost |  | $ | 77 |  |  |  | 647 |  |  |  | 230 |
The Gentherm GmbH defined benefit plan is underfunded by $4,000 and $3,647 as of December 31, 2016 and 2015, respectively. The net periodic benefit cost is included in selling, general and administrative expenses in the Company’s consolidated statements of income and actuarial gains and losses are included the Company’s consolidated balance sheet as part of accumulated other comprehensive income within shareholders’ equity. Actuarial gains or losses are amortized to selling, general and administrative expense in the Company’s consolidated statements of income using the corridor method. The following table describes the actuarial assumptions used to determine the benefit obligation and the net periodic service cost:
|  | 2016 |  |  | 2015 |
Discount rate |  |  | 1.69 | % |  |  | 2.21 | %
Expected long term rate of return on plan assets |  |  | 3.40 | % |  |  | 3.70 | %
Note 12 — Pension and Other Post Retirement Benefit Plans (Continued) Plan assets are comprised of Gentherm GmbH’s pension insurance policies and are pledged to the beneficiaries of the plan. A market valuation technique, based on observable underlying insurance charges, is used to determine the fair value of the pension plan assets (Level 2). The expected return on plan assets assumption used to calculate Gentherm GmbH’s pension benefit obligation was determined using actual returns realized on plan assets in the prior year. We do not expect contributions to be paid to the Gentherm GmbH defined benefit plan during the next fiscal year. The schedule of expected pension payments made to Gentherm GmbH defined benefit plan participants over the next 10 years is as follows:
Year |  |  |
2017 |  | $ | 258 |
2018 |  |  | 257 |
2019 |  |  | 255 |
2020 |  |  | 253 |
2021 |  |  | 251 |
2022 - 2026 |  |  | 1,238 |
Total |  | $ | 2,512 |
Gentherm has adopted a 401(k) plan to provide all eligible employees a means to accumulate retirement savings on a tax-advantaged basis, and eligible executive officers can participate in this plan on the same basis as other participants. Participants may defer specified portions of their compensation. On a discretionary basis, the Company matches a portion of the employee contributions. The Plan also allows for additional discretionary contributions. Gentherm made $1,289, $959 and $543 in matching contributions to the 401(k) plan in 2016, 2015 and 2014, respectively.

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